Baptist_Health_Assignment[1] - SaadAlghirairy 18 decrease...

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Baptist Health of South Florida Hector Sunol          Fritz Seide Eric Gonzalez        Aamer Radhwan           Keslere Ferrier         Joseph D Ruiz   Saad Alghirairy A synopsis of the problem and its causes: The main problems for Baptist Health is a decline in imaging volume causing an  18% decrease in revenue, and, as a result, lower net income. This sharp decline is  primarily a consequence of macroeconomic factors like long term unemployment being at  its highest ever, a slow or stagnant real estate market, the reluctance of banks to extend  credit so to stimulate business and investment, etc.; all adversely affect the health care  industry and so, BOS imaging business. Adding to that is Baptist Health aggressive growth in wrong timing, negatively  impacted by the economic downturn. This is coped with higher insurance costs which, in  turn, portion are passed down to employees making out of pocket costs to be much higher.  And lastly, due to the high quality of services offered and the use of high end equipment,  BOS operates on very high fixed costs which lead to charge higher premiums for services.  (BOS admits they charge more than their competitors for their CT of the head and MRI of  the lower back. The difference is around $300). Potential solutions: One possible solution is to open a new division under a different brand name that  will target the low income Market. Baptist Health main competitive advantage is providing  the fastest and best healthcare services to their customers. This competitive advantage  created a strong brand name and customer loyalty, which allowed Baptist Health to charge  1
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premium prices for their services.  By adopting this solution, Baptist Health will be able to  cover both the high and low end markets without affecting their original Baptist brand  name.  In addition, this solution will protect Baptist Health from any economic downturn. In  any recession, the number of job layoffs increases, which leaves a lot of people without  health insurance. For Baptist, who relies on insurance companies to pay for its customers  expenses, this increase number of uninsured people will impact its revenue. However, by  implementing this solution, revenues generated from the low end market will compensate  the decrease in revenues from the high end market.  One important note, if Baptist Health  decides to open a new division, it has to comply with new government regulations of  ObamaCare, which will affect the whole health care industry.
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